1 answer

2. (A simulated economy) Let Y,-F(K,,Lt)-AK) L. The discrete time version of the capital accumulation equation...

Question:

2. (A simulated economy) Let Y,-F(K,,Lt)-AK) L. The discrete time version of the capital accumulation equation is given by Lo-1 and labor grows at a rate of n-0.01. A-1, Ko-0.01 and 6-0.07 a) Assume that s-0.2. Find the level of consumption in the economy in periods 1,2,3,4 and 100. b) Repeat the computations in (a) assuing s 03 consumption over time after s increases to s = 0.33 d) Do the sanne as in part (c) but assuming that s increases to s = 0.5.

2. (A simulated economy) Let Y,-F(K,,Lt)-AK) L. The discrete time version of the capital accumulation equation is given by Lo-1 and labor grows at a rate of n-0.01. A-1, Ko-0.01 and 6-0.07 a) Assume that s-0.2. Find the level of consumption in the economy in periods 1,2,3,4 and 100. b) Repeat the computations in (a) assuing s 03 consumption over time after s increases to s = 0.33 d) Do the sanne as in part (c) but assuming that s increases to s = 0.5.

Answers

Given that, ピ The dEcge te trne version op the capital accumulation equa lionR b ven A=, Q) S 02 heep Columo A time period t Column B Por Constant A Column FD VTablh h, column E For variable L column F For varia ble Lt yヒ Formula in ane B, ヒ -AİKİk | | | 0.0) | 02/5uy3 |Formula n γουο & Should a 3 6 215443 | o.DS2 389|o.314179| 1,0/1 1. DO 6 656 | o2 S-0 level consumption ece nomy o 612 (b) Repeat the step whth s 2

Y,b 123 Yo, 842 S Given that econamy ia s change from 3 to o.32 cted State and Fory we will Sinulohon conducted in paγ we see -hat eaches state simlashy and wher 3 at yound 3 11 d) rwhen as. 226 | 5th8) 10.42.3 | О.H3H 088 0.61 o 90/ yy |0842-10,848 | 1.05ds,写 c91 ea sec steady ps reached fo time the steady state consumplron inciease. a rttto 哏change ins |s, change 유on s change Proa change 3 J. 03./ change in 12 di.</p><p>18/ Chan 2-1 c han iO ange in fre dt ). s.j.

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